Business Directories

IPIC picks banks for bond issue

Abu Dhabi, November 13, 2012

International Petroleum Investment Co (IPIC), the Abu Dhabi government-owned investment vehicle, has mandated banks for a bond issue which could be announced as early as Tuesday, sources familiar with the matter said.

Two sources indicated the upcoming bond would consist of a dollar tranche and another currency, most likely euros. All sources declined to be identified because details of the bond plans are not yet public.

"I think there would have to be a roadshow, they have a lot of catch-up chat to do with investors," a banker away from the deal told Reuters.

Other market sources said the name was well-known in global debt markets and the company could get away without a full schedule of investor meetings.

IPIC has interests in a number of European-based companies, including Spain's Cepsa and Austrian oil group OMV. Through its Aabar Investments unit, it also owns a stake in Unicredit.

IPIC last tapped debt markets with a $3.75 billion, three-tranche issue in October 2011 which reopened Gulf markets amid challenging global conditions, but observers said at the time that the AA rated company paid a big premium for the deal.

Yields on the $1.5 billion long 10-year portion of that deal have tightened considerably since issue. The 5.5 percent bond was bid at 115.7 cents on the dollar on Tuesday to yield 3.5 percent, according to Thomson Reuters data.

IPIC's total group debt at the end of 2011 stood at $35.8 billion, it said in June; that did not reflect the repayment of nearly $1 billion in 2012.

The firm reported a 96-percent slump in 2011 full-year profit as market volatility and currency exchange risks weighed on its investment portfolio. But profit from continuing operations, an indicator of core business performance, surged to $540 million in 2011, up over 350 percent from the previous year. – Reuters